Title
Cheng vs. People
Case
G.R. No. 207373
Decision Date
Mar 23, 2022
Lourdes Cheng, accused of Estafa for failing to return Paluwagan funds, was acquitted due to lack of proof of misappropriation but held civilly liable for unreturned amounts.

Case Summary (G.R. No. 207373)

Antecedents of the Case

An information was filed against Cheng in November 2000, accusing her of defrauding multiple complainants by failing to return their monetary contributions after she mismanaged the funds. Cheng contended that she did not owe the private complainants any money after 1998, as problems arose from borrowers' defaults in repaying loans, which she claimed depleted the paluwagan's available funds.

Ruling of the Regional Trial Court (RTC)

On February 9, 2007, the RTC convicted Cheng of Estafa, asserting that she misappropriated the money held in trust and failed to return it upon demand despite being aware of her obligation. Cheng received a sentence of 8 years and 1 day up to 20 years of reclusion temporal, mandated to indemnify the private complainants respective amounts.

Ruling of the Court of Appeals (CA)

The CA upheld the RTC's decision on May 31, 2012, confirming the existence of all elements of Estafa, especially noting that Cheng had failed to return the funds despite demands. Although the prosecution did not definitively prove that she was not authorized to lend money to non-members, the CA deemed her failure to account for the funds as circumstantial evidence of misappropriation.

Key Issues

The primary issue on appeal was whether petitioner Cheng was guilty of Estafa beyond a reasonable doubt. Cheng maintained that there was no appropriation involved, as the private complainants were aware that their contributions would be lent to other individuals. Cheng also argued that her inability to return the contributions was due to factors beyond her control, notably the failure of borrowers to repay their loans.

Court’s Findings

The Supreme Court found substantial merit in Cheng’s arguments, emphasizing the legal presumption of innocence and the prosecution's burden to prove guilt beyond a reasonable doubt. The Court ruled that the prosecution did not establish the crucial element of misappropriation, noting that all contributions made by the complainants were executed under the voluntary understanding that the funds would be lent out with thei

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